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GENERAL SITUATION IN MEXICO

Weekly Review # 89 I January 26, 2022

MANUFACTURING INDUSTRY LINK EV ANNOUNCES US$265 MILLION INVESTMENT TO BUILD ELECTRIC VEHICLE PLANT IN PUEBLA With an investment of 265 million dollars, the North American company Link EV, in association with the Chinese automotive company EV Dynamics and the Spanish company QEV Technologies, a specialist in electromobility, will install in Mexico the first last mile and urban transit passenger truck plant to immediately serve the local and Latin American markets, as well as North America. Sergio de la Vega, CEO of Link EV, a subsidiary of Citizens Resources (an energy transition company), explained to El Economista that the goal is to start production in Puebla at the end of this year, “at the latest in early 2023, because the demand for electric vehicles is high” in Latin America, as a result of the replacement of combustion units with sustainable energy. The Latin American market was being served with imports from Asia, in Hong Kong, where the plant for these commercial vehicles is located, but due to the high cost of sea freight from the East, the decision was made to choose Mexico as the producer for America, through Link EV, said de la Vega in an interview.

SOURCE: El Economista

The factory will be installed in Puebla, close to Volkswagen’s plants, to take advantage of the local supply chain, allowing Mexico to assemble 4,000 electric commercial and passenger vehicles. “Our plan is to build a first plant to produce the models, for which we are finding greater demand in the market. The idea is to do it relatively quickly because the demand is there. The need to serve these markets is not an issue for three or five years, but for this and the next. We have designed manufacturing processes that will allow us to be ready by the end of this year, which will depend on global supply chains,” he said. The governor of Puebla, Miguel Barbosa, confirmed the investment of Link EV Electric Vehicles, which will generate 400 direct jobs and 1,200 indirect jobs throughout the project. Link EV Electric Vehicles is part of Citizens Resources, a North American company based in Boston, Massachusetts, with more than 40 years focused on electric mobility solutions: vehicles, service, and electric charging networks.

GOOD NEWS WHO WILL PUBLISH A PLAN TO TRANSITION FROM PANDEMIC TO ‘CONTROL PHASE’ IN FEBRUARY Almost 2 years after the declaration of an international coronavirus emergency, WHO seeks to optimize health strategies, depending on each region. The World Health Organization (WHO) will publish at the end of February a new response plan to COVID-19 that will propose a transition at the end of which the current management of the disease as a pandemic will end, announced Monday, the director of Health Emergencies of the agency, Mike Ryan. The ultimate goal will be to move to a phase in which there is “sustained control” of the disease, similar to the way other respiratory problems such as influenza are managed, Ryan said at a technical conference on the pandemic during the WHO Executive Committee, which meets this week. “To end the international COVID-19 emergency by 2022, there are still many things to do, such as reducing uncontrolled infection, especially in vulnerable populations, and reducing the risk of new variants emerging,” the Irish expert stressed. Mortality rates (currently at 1.6%, taking into account the official figures of those infected and dead worldwide) must also be reduced, and “the long-term consequences of infection must be minimized,” said Ryan. To this end, he added, “national health strategies must be optimized,” and in this sense, he pointed out that due to the different situations experienced by each state (for example, the unequal vaccination rate), “each country has to find its own way down the mountain.” Ryan emphasized that it must be investigated what

level of public health measures will have social acceptance in the future steps to be taken, and stressed that the current strategy must also serve as preparation for future pandemics. In this regard, the WHO director of emergencies stressed that “the next pandemic will most likely be caused by a respiratory agent,” similar to the viruses causing influenza or the coronaviruses behind COVID-19, SARS, and other diseases. COVID-19 IN THE NEAR FUTURE The World Health Organization (WHO) general director, Tedros Adhanom Ghebreyesus, predicted that COVID-19 will not disappear in the short term and the world will continue to live with the virus, but he assured that “learning to live with this disease does not mean giving it total freedom.”

GOOD NEWS

“We are going to live with COVID-19 for the foreseeable future, and we need to learn to manage it with sustained and integrated systems for the control of acute respiratory diseases,” Tedros stressed at the opening of the WHO Executive Committee, which is holding its 150th session this week. However, he said, “learning to live with COVID-19 does not mean giving it total freedom; it cannot mean that we accept the current 50,000 deaths per week for a disease that is predictable and treatable”. He also called for “not ignoring the consequences of ‘long COVID-19,’ which are not yet fully known,” referring to the many people who manifest multiple health problems even after recovering from the disease. The head of the WHO said that there are different scenarios for ending the acute phase of the pandemic, but that “it is dangerous to assume that the Omicron variant is the last one or that we are already at the end.” “On the other hand, the conditions are optimal for new variants to emerge,” due to the record number of infections, which on January 20 were the highest in more than two years of the pandemic, with almost four million global positives in a single day. Tedros recalled that next January 30 will mark two years since the WHO declared an international emergency for the coronavirus (at that time, the disease had not yet been named COVID-19) when there were less than a hundred cases outside China and no deaths. “We understand that everyone is tired of the pandemic, that people are exhausted from movement restrictions, that economies and businesses are suffering, and many governments are walking a tightrope trying to

SOURCE: Forbes Mexico

balance what is effective and what is acceptable to the population,” Tedros stressed. PANDEMIC COULD ENTER NEW STABILIZATION PHASE: WHO The coronavirus pandemic could enter a new phase in the European region with “plausible hope” of stabilization, although it is necessary to remain vigilant, the World Health Organization (WHO) warned today. “The pandemic is far from over, but I hope we can end the emergency phase in 2022 and address other health threats that require our urgent attention,” the director of WHO’s regional office for Europe, Hans Kluge, said in a statement. The current phase is marked by the “sweep” of the Omicron variant in the region - which comprises 53 countries, including several in Central Asia - already accounting for 31.8% of new cases, up 15% from the previous week. “While Omicron appears to cause less severe disease than Delta, we continue to see a rapid increase in hospitalizations due to the high number of infections, compounded by the burden caused by Delta and the high number of secondary admissions,” the statement said. WHO notes that hospitalizations for Omicron require much less frequent admission to intensive care, where the majority of patients are unvaccinated. “This pandemic, like all previous pandemics, will end, but it is too soon to relax. With the millions of infections worldwide in recent and coming weeks, declining immunity and seasonality, it is almost a given that new variants of Covid-19 will emerge and return,” WHO admits.

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S Morning Press Conference January 19-25, 2022 COVID-19 Undersecretary Hugo Lopez-Gatell detailed the evolution of COVID-19 in the country and pointed out that there was only an increase of 12% this week. He noted that hospitalizations are 70% lower than those recorded in the second wave of the pandemic. If this trend continues, the end of the pandemic could be reached in Mexico and the world. Regarding vaccination, he pointed out that 161,466,948 doses have been applied. 83,349,759 people have been vaccinated, of which 93% already have the complete scheme and only 7% are new schemes. UNIONS The President affirmed that the 2019 labor reform focused on giving greater strength to workerS. He recognized that a process of transformation is taking place, which cannot be immediately, and that is why they won the same representations in some cases. He called for opposition leaders to strengthen their positions and continue advancing in favor of democracy. He reported that as of Monday 22, union leaders would be attending the morning conference to present their positions; the mechanism is yet to be defined. Now the process is carried out by means of a free and secret vote, not as before that the Government of Mexico and business owners imposed at their convenience.

SOURCE: https://www.youtube.com/channel/UCxEgOKuI-n-WOJaNcisHvSg

MEETING WITH THE UNITED STATES SECRETARY OF ENERGY The President stated that the visit was very cordial, and the electrical reform was discussed during the meeting. He pointed out that part of the agreements is to review the companies on a case-by-case basis, where it is considered that there is an injustice.

MEASURES TAKEN BY STATES IN MEXICO

BAJA CALIFORNIA The State of Baja California remains high-risk or orange light. Official reports confirm 7,291 active cases in the past 14 days. Baja California’s Health Secretary mentioned that we need to continue respecting health measures such as 50 percent capacity in non-essential activities and correct use of face masks to stop the transmission of the new variant. The vaccination plan continues every day in the different municipalities. The industrial sector had a meeting with the State Commission for the Protection against Sanitary Risks (COEPRIS) to learn about the new provisions for sanitary protocols. SONORA The State of Sonora changed to highrisk or orange light with only one municipality in low-risk or green light and six municipalities in medium-risk or yellow light. Official reports confirm 297 new cases in the last 24 hours. The Sonora’s Health Secretary had a working meeting in coordination with business chambers to review health capacity and protocols against COVID-19.

MEASURES TAKEN BY STATES IN MEXICO

COAHUILA Based on information from the Ministry of Economy and the Ministry of Labor of Coahuila, of 29,506 workers from 306 companies surveyed in the Laguna Region, 6 percent have active cases of COVID-19, that is, 1,724 employees. TAMAULIPAS Even though the Tamaulipas Ministry of Health has reported an increase in cases of Covid, the Federation returned the state to yellow at the traffic light of epidemiological risk by COVID-19, which means medium risk. NUEVO LEON The government of Nuevo Leon announced a new cross-border vaccination route on the Colombia Bridge, where people can go by bus or in private cars after prior online registration.

MEASURES TAKEN BY STATES IN MEXICO

AGUASCALIENTES Due to the epidemiological figures registered in the past two weeks, in which there was a significant increase in the number of COVID-19 infections, Aguascalientes was placed at a higher risk level in the national epidemiological traffic light, said Miguel Angel Piza Jimenez, Secretary of Health. At a press conference, the official announced to society and the media that the placement given by the federation to each entity does not reflect the current epidemiological situation in parallel; therefore, he called on families to remain calm and follow sanitary protocols. He stated that currently, a decrease in social mobility had been observed, especially in entertainment centers, bars, and restaurants; besides, there is a plateau in the number of COVID-19 positive cases, without the presence of new abrupt peaks.

GUANAJUATO increased 14% during the last week -from 361 to 413 patients from Monday to Sunday-, according to reports from the Ministry of Health of Guanajuato (SSG). This increase means that Guanajuato has reached a 27% bed occupancy rate, considering that there are 1,527 hospital spaces available for the care of COVID-19 patients. The number of active cases maintained its increasing pace over the last three weeks, reaching 16,570 people currently recovering from the disease. This is 3,000 more compared to last Monday.

MEASURES TAKEN BY STATES IN MEXICO

QUERETARO The government of Queretaro plans to prevent COVID-19 rebound from impacting the state’s economic activity; however, if necessary, measures will be taken, said Governor Mauricio Kuri Gonzalez, when addressing a message to the population. In the last two weeks, the state registered 12,841 infections. However, the level of hospitalization is 180 people due to the progress in vaccination coverage, since 98% of the population over 18 years old has the first dose and 87% has the two doses, he said. However, given the number of infections we currently have, the federal government decided to move Queretaro to yellow traffic light. At the same time, the Technical Committee for the attention of COVID-19 in the state determined to maintain our entity in modified Scenario A,” said the Governor.

JALISCO Jalisco’s Ministry of Health registered 3,755 new coronavirus infections, bringing the total number of confirmed cases to 451,085 throughout the state and 17 deaths, bringing the total number of deaths in the state to 17,846. Adding the negative results reported by all laboratories, 1,785,764 cases have been ruled out in Jalisco to date, and 26,175 cases are suspected.

MEASURES TAKEN BY STATES IN MEXICO

STATE OF MEXICO Given the return of the State of Mexico to the yellow epidemiological traffic light, the 125 mayors of the state were requested to monitor and maintain sanitary measures to protect the life and health of the people of the State of Mexico, allowing only a maximum capacity of 50 percent in mass events of any kind. The General Secretary, Ernesto Nemer, informed that, with the yellow traffic light in the State of Mexico, the provisions contained in the “Agreement establishing measures for the continuation of economic, social and governmental activities due to the SARS-CoV-2 virus (COVID-19)”, published in the Government Gazette on October 15, 2021, must continue to be implemented. CDMX With the fourth wave of the COVID-19 pandemic, driven by the omicron variant, so far in 2022, hospital occupancy in the country’s capital has increased fivefold, reaching 73.11 percent. According to the COVID-19 Report, which the Mexico City government publishes daily, the number of occupied hospital beds increased from 383 on January 2 to 2,58 on January 22, representing an increase of 437 percent.

ECONOMIC RECOVERY CUSTOMS TO RECORD TAX COLLECTION IN 2021. Foreign trade collection has become one of the most important sources of government revenue. The accumulated tax collection in Mexico’s customs during 2021 registered a historic figure of one trillion 3 thousand 951.4 million pesos, the highest collection since records have been kept. Under the Ministry of Finance, Mexico’s National Customs Agency (ANAM) reported that it collected 133 billion pesos more than during 2020, real growth of 15.39 percent. Similarly, 30 billion pesos more were collected last year compared to 2019. According to official data, the customs that collected the most were Nuevo Laredo, Manzanillo, Veracruz, Lazaro Cardenas, Mexico City International Airport, Tuxpan, Altamira, Ciudad Juarez, Coatzacoalcos and Matamoros.

SOURCE: El Financiero

“This is a historical figure, which makes foreign trade collection one of the most important sources of revenue for the Federal Government. This great result fulfills the instruction given by President Andres Manuel Lopez Obrador and the very expectations that Mexico’s National Customs Agency set for itself to reactivate foreign trade after the pandemic,” said ANAM head Horacio Duarte. Torreon, San Luis Rio Colorado, Ciudad Miguel Aleman, Ciudad Camargo, Agua Prieta and Mexicali had more economic activity as a result of the fight against corruption and the integration of the armed forces. The cases of Ojinaga and Mexicali stand out, which had an increase in revenue of 410 percent and 43 percent, respectively, compared to 2020. Likewise, Ciudad Camargo reached, for the first time, a figure of more than 11 billion pesos, doubling the previous year’s revenues.

TOWARDS THE “NEW NORMAL”

DISTRIBUTION OF DEATHS PER STATE DUE TO THE PANDEMIC

INFORMATION UPDATED ON JANUARY 24, 2021 AT 19:00 HRS LOCAL TIME.

NEW CASES REPORTED: 17,938

SOURCE: https://www.gob.mx/salud/

CONFIRMED CASES: 4,685,767

NEW DEATHS REPORTED: 475

CONFIRMED DEATHS: 303,301

INCREASE OF CONFIRMED CASES SINCE THE FIRST REPORT MAP WITH THE DISTRIBUTION OF THE INCIDENCE RATE OF ACCUMULATED CASES OF COVID-19 BY ENTITY OF RESIDENCE.

National rate 225.97

0 to 10.0 (4 states)

40.1 to 50 (2 states)

10.1 to 20 (13 states)

50.1 to 60 (1 states)

20.1 to 30 (5 states)

60.1 to 70 (1 states)

30.1 to 40 (4 states)

>70 (2 states)

Elaborated by Prodensa with information from the Health Ministry of Mexico

PANDEMIC’S SITUATION IN THE WORLD • As of January 24, 2022, globally there have been reported 349,641,119 confirmed cases (2,899,491 new cases) of COVID-19 and 5,592,266 deaths (7,892 new deaths*). Lethal rate: 1.6%. In the last 14 days, 41,282,691 cases were reported globally.

SOURCE: https://www.gob.mx/salud/

TOWARDS THE “NEW NORMAL” INCIDENTS OF CONTAGIONS IN THE POPULATION BY REGION AS OF JANUARY 24

DEATH INCIDENTS IN POPULATION BY REGION AS OF JANUARY 24

SOURCE: https://www.gob.mx/salud/

EHS

WHEN TO STAY HOME

Calculating Quarantine The date of your exposure is considered day 0. Day 1 is the first full day after your last contact with a person who has had COVID-19. Stay home and away from other people for at least 5 days. IF YOU Were exposed to COVID-19 and are NOT up-to-date on COVID-19 vaccinations Quarantine for at least 5 days • Stay home. Stay home and quarantine for at least 5 full days. • Wear a well-fitted mask if you must be around others in your home. • Get tested. Even if you don’t develop symptoms, get tested at least 5 days after you last had close contact with someone with COVID-19. After quarantine • Watch for symptom. Watch for symptoms until 10 days after you last had close contact with someone with COVID-19. • If you develop symptoms. Isolate immediately and get tested. Continue to stay home until you know the results. Wear a well-fitted mask around others. Take precautions until day 10 • Wear a mask. Wear a well-fitted mask for 10 full days any time you are around others inside your home or in public. Do not go to places where you are unable to wear a mask. • Avoid travel • Avoid being around people who are at high risk

DAVID ANTUNEZ Environmental, Health, and Safety Director.

LABOR

ALVARO GARCIA HR, Vice President

REMOTE WORK ARRANGEMENTS CONTINUE TO BE A GREAT OPPORTUNITY In a job market where employees seek more flexibility both to accept a new job opportunity or to continue working with their employer, for companies establishing good remote work policies becomes critical to be able to attract and retain talent. Today companies have a great opportunity to review their work schemes to incorporate flexible and remote work arrangements. Home office is on top of the employers’ preferences. The telework figure was incorporated into the Mexican legislation just one year ago. Even when not all legal regulations for remote work have been approved, that does not prevent companies from proactively putting good remote work arrangements into practice.